resortdude

I run a fairly substantial, remotely located resort in California and I think you definitely have some challenges in front of you, the largest of which are your utilities. It is easy to take for granted the easy access and no real regulations that city/county/municipal systems provide for but it is much more challenging to be fairly self sufficient.

In the use case you have right now, non-commercial, you can pretty much do whatever you want. But once you go commercial you definitely have some challenges you will need to work through.

Water - You know this is a big deal, but given your comment about the options you feel are available to you (water tower, run off, mine pumping, etc...) I feel like you may not appreciate how challenging this one is. If you are providing your own sourced water and are commercial, and as long as year round you have less than 25 people living there year round, you should research Transient Non-Community Water systems. And under any circumstances you do NOT want to be a Non-Transient, Non-Community Water system, the testing and regulations will crush you as a small operator. Here is a link:

https://www.epa.gov/dwreginfo/information-about-public-water-systems

Now the rules for water are largely defined by the EPA but you better bet that the California Water Resources Board has their own rules and regulations you will need to adhere to. I can tell you right up front that if you use surface water (run off for example) you will have a huge headache to prove the water is safe and will need a treatment system, if only for filtration and chlorination. The odds of them allowing you to pump out of the mine are slim to none. Really, well drilling is the only viable option. I oversee our water system and we have 7 active wells, each one over 1000' deep. They vary in production between 2 GPM and 20 GPM, our daily usage is 20k and I am a state certified D2 and T2 water operator. Each well cost, including associated infrastructure and testing, about $50k a piece.

Sewage - As a commercial entity you will need some kind of system. Not sure your county rules but you will probably need an engineered system and if it's big/complex enough you will need a Wastewater Operator to run it for you. Those guys are expensive! You better pray they allow you to use a traditional leach field system but in this day and age, I feel it's unlikely.

Propane - Can they deliver that up your road? Will you have tanks large enough for a winter supply? As a commercial enterprise there is no way they let you hook up and store 50 little propane tanks around your property. Would your tank be above ground or below ground?

Electricity - If you can get away with electric cooking and water heating, you will definitely need a reliable source of electricity. And if you have paying guests, you better have a back-up generator. I just bought a new, smaller diesel one. $50k all said and done with a 7 day fuel tank, concrete pad, delivery and crane placement, county permitting. And don't think you can just get away with a used generator someone sells you. Look up CARB, California Air Resource Board.

Fire Suppression - As a commercial Enterprise, you will likely need a fire suppression system, although this is typically a county level decision. But hope you don't need one, because the cost of installing and maintain one are terrible. You will need a sufficient water supply. So my water tank is 90k total but I have to keep 55k gallons in it at all times for fire suppression, so I really only have 40k of usable water at any given time, if my tank is full. Also, better hope your tank is high enough in elevation that you don't need a diesel pump for your fire suppression system or a variable speed booster pump for your domestic water system.

Employees - So this might be your biggest challenge. I have 120 employees total, 80 of whom live on site and i provide housing and 3 meals a day. And also deal with all the interpersonal bullshit that goes along with it.

So let's end with some numbers.... Learn these terms: ADR, RevPAR, & Occ%. Let's say you have 20 rooms to rent. Your Average Daily Rate (ADR) is $100/night and let's say you are open year round (a big IF given your snow) and your occupancy percentage is 50% (a pretty realistic goal given your circumstances). $100 * 20 * 365 *.5 = $365k in revenue. Now you need to start subtracting the fees that OTA (online travel agency) charge which in your case, as a small time operator, would be 20%-ish. And how much of your bookings come from OTA's? At the beginning you will live and die by bookings from Expedia and Booking.com because the public doesn't understand how terrible they are for them as a consumer. But your life's goal from day 1 is organic bookings and minimizing those OTA bookings. But remember, a room night is a perishable product, so you got to use them.

I think I have rambled on enough and will skip talking about your capital costs to get up and running (with wells and septic and power), skip talking about operating costs, skip talking about activities like guiding on your property and mine tours and the insurance costs, skip talking about restaurant and tavern for your guests and the licensing and building codes required... You get the idea.

Wish you the best of luck! The good news is that your location is actually incredibly beneficial to you, although you may not know why. And you have a unique product. So there is potential. But good lord do you need a lot of capital.

Well, none of our housing allows children, it's more like college dorms. So no kids. But my wife would definitely say it's cult like! I guess I like my job too much!

Ha! Well certainly not the intention. Just realize California can be expensive to do something like this. Don;t get me wrong, I like the idea of having a safe drinking water supply no matter where I go in the state, but its challenging!

The fee can actually be higher than 20%. But set aside the pain in the ass that is Expedia and Booking (and other OTA's) for hotel operators. The real problem is for the guest/customer. You want to cancel your booking because of COVID or any other reason? Don't call me, call Expedia/Booking. They aren't answering the phone? Sorry but you need to talk to them. In this particular COVID instance they added a tool for hotels to cancel for guests but I don't expect that to last because it makes it too easy for hotels to defraud them their commission. Oh, there's something we, the hotel, wants to tell you? Too bad, I can't because they don't give me your full information (like cell phone number). Because of the commission's hotels are actually dis-incentivized to sell through OTA's, so while you may not see availability on Expedia for a hotel you like, you might get it if you check their website or call. Because of parity rules, you will generally get the BAR (Best Advertised Rate) but you better bet that savvy hotels have rates that are better than BAR they just can't advertise it, so despite their guarantees, Expedia/Booking do not have the best rates for hotels in many instances.

I can go on and on. But I will also say your method is exactly what I do. Check websites for current BAR and then call them to see if they can match or do better. Unfortunately, many big/corporate places don;t give their Front Desk the ability to make deals, but you bet your ass the smaller ones do.

Well, I was until 3 weeks ago. And I will again, just can't tell you your start date!